Depository Institutions Deregulation and Monetary Control Act of 1980

Depository Institutions Deregulation and Monetary Control Act of 1980

Federal legislation that accomplished phenomenal deregulation of federally chartered financial institutions,leading to state deregulation so that state-chartered financial institutions could compete with their federal cousins.Regulation Q phased out the former limits on interest that could be paid on deposits.Many analysts say that the resulting unbridled competition for depositors'money,leading to a bidding war to gain depositors,drove financial institutions to make ever riskier loans in order to obtain the high interest rates necessary to service the deposits.According to such analysts, this legislation was one of the primary factors in the savings and loan crash, the banking crisis, and the FDIC bailout of the mid to late 1980s.

This provision would extend to banks that are members of the Federal Reserve System a privilege that was granted to nonmember institutions at the time of the Depository Institutions Deregulation and Monetary Control Act of 1980.

Second, the Depository Institutions Deregulation and Monetary Control Act of 1980, the Garn--St Germain Depository Institutions Act of 1982, and other regulatory changes in the 1980s expanded the number and types of financial institutions providing business credit.

Perhaps the most notable legislation affecting the discount window has been the Depository Institutions Deregulation and Monetary Control Act of 1980, which dramatically expanded the universe of depository institutions eligible to borrow at the discount window.

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